Germany's Siemens expects earnings growth to accelerate in its current financial year as new chief executive Joe Kaeser steps up efforts to catch more profitable rivals and cost cuts start to bear fruit.

It said today it expected its earnings per share to rise by at least 15 per cent from last year’s €5.08, more than double the 7.2 per cent growth rate of the prior year.

That outlook is conservative compared with average analyst expectations for a 31 per cent increase in a Reuters poll.

Mr Kaeser was named CEO in late July, after a series of profit warnings and a messy boardroom tussle led to the ouster of his predecessor Peter Loescher.

He has yet to lay out his plans to bring the company, Germany’s second-most valuable, back on track.

Siemens has fallen behind rivals such as Switzerland's ABB and US-based General Electric in terms of profitability in recent years due to a focus on sales growth as well as poor project management that resulted in a series of one-off charges.

In the fourth quarter, it booked a series of project charges, including some related to offshore grid connections and its tidal hydro power business. It also took a €688 million hit in connection with a €6 billion savings programme.

Due largely to those charges, operating profit from its four main businesses - Industry, Energy, Healthcare and Infrastructure & Cities - dropped 17 per cent to €1.61 billion.

Siemens also announced plans to buy back up to €4 billion of its own shares and said it would pay its shareholders a dividend of €3 per share for last year, unchanged from a year earlier. (Reuters)